USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 3 of 40
National Association of State Utility Consumer Advocates, Public
Knowledge, Vonage Holdings Corporation, the Open Internet Coalition,
and CTIA – The Wireless Association® have appeared as intervenors in
support of Appellee-Respondents.
As set forth in the appendix to the ruling on review, the persons
who appeared before the agency in the proceedings below are:
100 Black Men of America et al.2Wire, Inc. 4G Americas, LLC 4Info, Inc. ACT 1 Group et al.Adam Candeub and Daniel John McCartney ADTRAN, Inc. Adventia Innovative Systems African American Chamber of Commerce - Milwaukee African Methodist Episcopal Church Aircell LLC Akamai Technologies, Inc. Alabama State Conference of the NAACP Alarm Industry Communications Committee Alcatel-Lucent Allbritton Communications Company Alliance for Digital Equality Alliance for Telecommunications Industry Solutions Amazon.com American Arab Chamber of Commerce American Association of Independent Music American Association of People with Disabilities American Business Media American Cable Association American Center for Law and Justice American Civil Rights Union American Consumer Institute CCR American Council of the Blind

C.
Related Cases
This case has been consolidated with Case Nos. 11-1356, 11-1403,
11-1404, and 11-1411.
This case is related to Cellco Partnership d/b/a Verizon Wireless v. FCC, Nos. 11-1135 & 11-1136 (D.C. Cir.), in that both cases involve
substantially the same parties and the similar legal issue of the
Commission’s statutory authority under Section 706 and Title III of the
Communications Act to regulate broadband Internet services and the

The Commonwealth of Virginia, pursuant to Fed. R. App. P. 29(a),
files this Amicus Brief in support of the argument made by the Joint
Brief for Verizon and MetroPCS (Doc. 1381604) that the FCC's
assertion of regulatory authority is without legal basis. Virginia and
the other Amici States have an interest in preserving the actual
statutory scheme established by Congress because of their policy in
favor of property rights and free markets and of preserving the residual
regulatory power retained by the States. The Congressional scheme,
properly construed, leaves room for those closest and most accountable
to regulate in the interests of their constituencies and reserves open
space for individual innovation and free exchange unchecked by the
heavy hand of distant, unaccountable bureaucracies. Because the
FCC's interpretation of Congress' delegation, where it does not actually
violate its express terms, is untethered to the statutory text and knows
no logical limit, it should be rejected.

SUMMARY OF ARGUMENT

Congress has delegated to the FCC certain, defined regulatory
authority. Specifically, Congress elected to afford the FCC the power to
1

Not only is the FCC regulating contrary to expressed intent, it has
not identified any plausible, affirmative statutory authority for the FCC
to regulate as the Order does. Instead, the FCC in the Order cites a
number of disparate provisions, sharing only one commonality: no one
provision standing alone, nor all of them standing together, confers the
claimed authority. The FCC's attempt to override the settled judgment of
Congress not to regulate in this way should be rejected.

ARGUMENT

I.

The Order Subjects Broadband Internet Providers to Common-Carrier Regulation, in Contravention of Statute.

Although it "is enough here for [the Court] to find that the
Communications Act of 1934 does not indicate a legislative intent to
2

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 21 of 40
delegate authority to the Commission to regulate" as they desire to, American Library Association v. FCC, 406 F.3d 689, 706 (D.C. Cir.
2005), the services regulated by the Order are expressly defined to lie
outside the purview of the FCC.

The Communications Act of 1934 ("Act"), 47 U.S.C. §§ 151 through
621, as amended, authorizes the broad regulation of "telecommunication
carriers," which includes "any provider of telecommunication services"
who offer "directly to the public, or to such classes of users as to be
effectively available directly to the public, regardless of the facilities
used," to transmit information, "for a fee," "between or among points
specified by the user, of information of the user's choosing, without
change in the form or content of the information as sent and received."
Section 3(50), (51), and (53); 47 U.S.C. § 153(50), (51), and (53). The Act
provides that "telecommunication carriers" are to "be treated as a
common carrier" subject to broad FCC regulation under Title II, Sections
201 through 231; 47 U.S.C. §§ 201 through 231, but "only to the extent
that it is engaged in providing telecommunication services." Section
3(53); 47 U.S.C. § 153(53).
3

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 22 of 40

The Act also provides for common-carrier regulation of "commercial
mobile service." That is, all mobile services "provided for profit [that]
make[] interconnected service available (A) to the public or (B) to such
classes of eligible users as to be effectively available to a substantial
portion of the public." Crucially, the Act expressly exempts "private
mobile service" from common-carrier regulation "for any purpose." See
Section 332(c)(1)(A) and (2), (d)(1) and (3); 47 U.S.C. § 332(c)(1)(A) and
(2), (d)(1) and (3).

1 The various types of broadband Internet service, whether wireline, Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, 20 F.C.C.R. 14853, 14862-65 (2005) ("Wireline Order"), wireless, or mobile wireless, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, 22 F.C.C.R. 5901, 5909-12, 5915-21 (2007) ("Wireless Order"), have been defined, like the cable broadband Internet service in Brand X, as an "information service" that is "not subject to Title II regulation as common carriers." Wireless Broadband Order, 22 F.C.C.R. at 5916.
4

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 23 of 40
U.S.C. § 153(24). Such providers "are not subject to mandatory
common-carrier regulation" by the FCC, but only to the FCC's "Title I
ancillary jurisdiction," contained in Section 4(i), 47 U.S.C. § 154(i). See Brand X, 545 U.S. at 975-76 ("The Act regulates telecommunications
carriers, but not information-service providers, as common carriers."); see also,Act § 332(c)(2); 47 U.S.C. § 332(c)(2) (prohibiting regulation of
private mobile service providers as common carriers). Thus, the FCC is
duty bound to refrain from common-carrier regulation of broadband
Internet providers, a point the FCC conceded in FCC v. Comcast, 600
F.3d 642, 645 (D.C. Cir. 2010), and did not dispute in the Order. Yet
the "fixed and mobile broadband providers" who are regulated by the
Order are unquestionably being regulated as common carriers despite
being only providers of information services and private mobile services. See Order, 76 Fed. Reg. at 59192.

B.

The Order Imposes Common-Carrier Obligations on Broadband Internet Providers by Fixing Prices, Prohibiting Discrimination between Users and Uses, and Requiring Public Disclosure of Practices.

Despite the FCC's conclusory claim to the contrary, the agency is
imposing many common-carrier obligations on all broadband Internet
providers. Hence, the Order's requirements violate the limitation in
5

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 24 of 40
Section 332(c)(2), as well as the limitation in Section 3(24). See Order,
76 Fed. Reg. at 59208 n.92. It is the "character of [the] regulatory
obligations" imposed on the carrier, not whether "the rules promote
statutory objectives," that controls whether the FCC's regulation of
entities not subject to common-carrier regulation exceed its authority. See FCC v. Midwest Video Corp. (Midwest Video II), 440 U.S. 689, 702
(1979). At bottom, a provider is made a "common carrier" whenever the
law prohibits the provider from "'mak[ing] individualized decisions, in
particular cases, whether and on what terms to deal.'" Id. at 701
(quoting Nat'l Ass'n of Regulatory Util. Comm'rs v. FCC (NARUC I),
525 F.2d 630, 641 (D.C. Cir. 1976)).

Significantly, for purposes of this appeal, the Order promulgates
four rules, three of which are placed in Sections: the "Transparency,"
"No Blocking," and "No Unreasonable Discrimination" provisions, 8.3,
8.5, and 8.7, respectively. The fourth requirement, the Order's ban on
"charging . . . a fee" "for delivering traffic to or carrying traffic from the
broadband provider's end-user customers" to "edge providers," those
who provide "content, application[s], service[s], [or] device[s]" to end
users, constitutes the "No Fee" rule. Order, 76 Fed. Reg. at 59192 n.1,
6

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 25 of 40
59205, 59232. These four rules constitute "a series of interrelated
obligations ensuring public access to [broadband Internet service] and
regulat[ing] the manner in which access is to be afforded and the
charges that may be levied for providing it." Midwest Video II, 440 U.S.
at 692. Therefore,"[e]ffectively, the Commission has relegated
[broadband Internet service providers], pro tanto, to common-carrier
status." Id. at 700-01.

The
"No
Unreasonable
Discrimination"
rule
prohibits
"unreasonably discriminat[ing] in transmitting lawful network traffic
over a consumer's broadband Internet access service." Order, 76 Fed.
Reg. at 59232. Broadband Internet providers are prohibited from
entering into "a commercial arrangement [with] a third party to directly
or indirectly favor some traffic over other traffic," and from "prioritizing
its own content, applications, or services, or those of its affiliates." Id.
at 59206, 59207. Forbidding a private company from tying price to
service or preferring certain classes of customers gives rise to common-
carrier status.2

These restrictions, coupled with the "No Fee" rule, which serves to
fix the price to be charged the public for service, completely prevent

2 That the "No Blocking" and "No Unreasonable Discrimination" rules allow for "reasonable network management" have no effect upon whether common-carrier obligations are imposed, just as allowing a bus company to require would-be riders to enter the bus one at a time, and sit two to a seat, does not change the nature of the obligation to transport all persons at the same rate. See NARUC I, 525 F.2d at 641 (reciting that common carriers retain the right to "turn away" business "because it is not of the type normally accepted or because the carrier's capacity has been exhausted.").
8

According to Midwest Video II, courts should determine whether
any portion of the service provided is made subject to common-carriage
obligations, not whether the regulated entity remains free to control
other portions of its enterprise. See 440 U.S. at 700-01 n.9 (noting that
"[a] cable system may operate as a common carrier with respect to a
portion of its service only" in holding that access rules that required
"cable operators to [allow all] members of the public who wish to
communicate by the cable medium" to viewers to do so on their cable
systems "relegated cable systems . . . to common-carrier status"); see alsoNARUC I, 525 F.2d at 641 (To be a common carrier, "a given
carrier's services [need not] practically be available to the entire public.
One may be a common carrier though the nature of the service rendered
9

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 28 of 40
is sufficiently specialized as to be of possible use to only a fraction of the
total population.").

The fact that these rules would constitute valid exercises of the
FCC's authority to regulate common carriers confirms the Order's
character as one imposing common-carrier obligations for broadband
Internet providers, in excess of the FCC's authority. See Section 201(a);
47 U.S.C. § 201(a) (requiring "every common carrier engaged in . . .
communication by wire or radio to furnish such communication service
upon reasonable request"); Section 201(b); 47 U.S.C. § 201(b) (requiring
that "[a]ll charges . . . be just and reasonable"); Section 202; 47 U.S.C. §
202(a) (prohibiting "any common carrier [from] mak[ing] any unjust or
unreasonable discrimination in charges, practices, classifications,
regulations, facilities, or services"); Section 218; 47 U.S.C. § 218
(requiring common carriers to provide certain information to the FCC).

II.

The Order's Assertion of Authority is Untethered to and Unbounded by the FCC's Statutory Delegations of Authority.

No provision of the Act may be fairly read to foreshadow, much
less intend, FCC regulation of broadband Internet access as undertaken
in the Order. "It is axiomatic that administrative agencies may issue
10

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 29 of 40
regulations only pursuant to authority delegated to them by Congress,"
and it is similarly axiomatic that "[t]he FCC may act either pursuant to
express statutory authority to promulgate regulations addressing a
variety of designated issues involving communications, . . . or pursuant
to ancillary jurisdiction," but may not act simply on its own sense of
good policy on all matters within its general sphere of interest. Am. Library Ass'n, 406 F.3d at 691, 692, 698 ("[T]he FCC's power to
promulgate legislative regulations is limited to the scope of the
authority Congress has delegated to it."). And the FCC's ancillary
authority may be exercised only over those "regulated subject[s]" within
the FCC's Title I jurisdictional grant and then only by regulations
"'reasonably ancillary to the Commission's effective performance of its
statutorily mandated responsibilities.'" Comcast, 600 F.3d at 646
(quoting Am. Library Ass'n, 406 F.3d at 692). Because the Order is not
within the FCC's expressly delegated regulatory authority over
broadband Internet service, or any authority ancillary to its express
authority, the Order exceeds the outer limits of the FCC's power.
11

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 30 of 40

A.

There is No Express Statutory Authority for the FCC to Regulate Broadband Internet Providers as Such.

In the present case, as in the past, the FCC founds its regulations
not on "delegations of regulatory authority" by Congress, but on mere
generalized statements of Congressional purpose, policy, or objectives. See Comcast, 600 F.3d at 654. But "statements of policy, by themselves,
do not create 'statutorily mandated responsibilities.'" Comcast, 600
F.3d at 644 (holding that "[t]he teaching" of the case law on the FCC's
ancillary authority is "that policy statements alone cannot provide the
basis for the Commission's exercise of ancillary authority"). And the
requisite "close and searching analysis of congressional intent," ACLU v. FCC, 823 F.2d 1554, 1557 (D.C. Cir. 1987), turns up no evidence that
the "broad authority" to regulate the Internet claimed by the FCC was
delegated to it by Congress. See Order, 76 Fed. Reg. at 59214.

As recently as 2010, the FCC conceded the lack of any express
authority to regulate broadband Internet services. Comcast, 600 F.3d
at 645. To defend this Order, however, the FCC cobbles together an
array of statutory policy statements in lieu of statutory delegations of
authority. The only serious candidate of a source of express authority
claimed by the Order is Section 706 of the 1996 Telecommunications
12

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 31 of 40
Act ("1996 Act"), 47 U.S.C. § 1302, entitled "Advanced
telecommunications incentives." That section provides:
The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable
and
timely
basis
of
advanced
telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.
1996 Act § 706(a); 47 U.S.C. § 1302(a). The next subpart directs the
Commission, upon finding that "advanced telecommunications
capability is [not] being deployed to all Americans in a reasonable and
timely fashion," to "take immediate action to accelerate deployment of
such capability by removing barriers to infrastructure investment and
by promoting competition in the telecommunications market,"
specifically targeting "unserved" "geographical areas." 1996 Act §
706(b); 47 U.S.C. § 1302(b) and (c).

After this Court concluded that the FCC was bound by an earlier
interpretation of that provision as not providing "'an independent grant
13

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 32 of 40
of authority'" to which any regulation could be ancillary, Comcast, 600
F.3d at 658-59 (quoting In re Deployment of Wireline Servs. Offering Advanced Telecomms. Capability, 13 F.C.C.R. 24,012, 24,047, ¶ 77
(1998) (Advanced Series Order)), the FCC, in the Order under review,
refused to honor that earlier Order's plain meaning, as construed by
this Court, and instead cited Section 706 as a font of "substantive
authority." Order, 76 Fed. Reg. at 59215 n.126, n.128. In view of this
Court's decision, the FCC is not free to simply ignore its earlier
interpretation of Section 706. Nor does the text of that statute permit
the construction the FCC has placed upon it.

First, it would be odd indeed to read a statute directing both "[t]he
Commission and each State commission with regulatory jurisdiction
over telecommunication services" to "encourage the deployment on a
reasonable and timely basis of advanced telecommunications capability
to all Americans" as one delegating federal authority to regulate
information services and private mobile services. Furthermore, both
subparts of Section 706 of the 1996 Act speak only to the rate and
extent of geographic deployment and distribution of telecommunications
infrastructure, e.g., the laying of fiber optic lines and so forth, not to the
14

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 33 of 40
network management practices of broadband Internet providers
nationally, putting the latter outside the scope of any supposed
delegation. The fact that the aim of this section is ensuring the
provision of necessary infrastructure to various parts of the country is
confirmed by the repeated references to providing access to the Nation's
"elementary and secondary schools and classrooms." 1996 Act § 706(a)
and (b); 47 U.S.C. § 1302(a), (b), and (c); cf. 20 U.S.C. § 7801(18) and
(38). Finally, by directing the use of specific regulatory powers already
granted to the FCC, see (Doc. 1381604 at 29-30), and not simply
authorizing the FCC to utilize all methods that seem advisable to
accomplish the statutory end, Section 706 confirms that it was not
Congress' intent to delegate to the FCC general regulatory authority
over broadband Internet providers, but only to direct the FCC to use its
conferred powers "to encourage . . . deployment" of network
infrastructure. 1996 Act § 706; 47 U.S.C. § 1302(a).

No other provision cited, or theory postulated, by the FCC fares
any better for none speak to broadband. So the agency is reduced to
postulating statements of Congressional policy or purpose as statutory
delegations. See Order, 76 Fed. Reg. at 59214 (citing Section 230(b)(2);
15

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 34 of 40
47 U.S.C. § 230(b)(2)). But this argument was rejected by this Court
expressly in Comcast. See 600 F.3d at 654 (rejecting Act § 230; 47
U.S.C. § 230 as a basis for FCC regulatory authority over the Internet,
for "policy statements alone cannot provide the basis for the
Commission's exercise of ancillary authority"). In sum, there is no
authority for the "No Blocking," "No Unreasonable Discrimination," and
"No Fee" rules.

Finally, the "Transparency" provision similarly suffers from want
of express statutory authorization. Neither provision cited by the Order
in support, see Comcast, 600 F.3d at 660 (holding that "the Commission
must defend its action on the same grounds advanced in the Order"),
confer upon the FCC a statutory duty to obtain information from
broadband Internet providers. See Section 4(k)(1); 47 U.S.C. § 154(k)(1)
(merely identifying the contents of reports to be submitted to Congress);
Section 218; 47 U.S.C. § 218 (authorizing the FCC to seek "full and
complete information necessary to enable the Commission to perform
the duties and carry out the objects for which it was created," but only
from "all carriers subject to this Act" (emphasis added)). Thus, the FCC
16

The Order's Claim of Ancillary Authority Fails Because The Ancillary Authority Claimed is Unbounded.

By offering a theory of ancillary authority that would create broad
authority where none otherwise exists, the FCC has necessarily failed
to show that the regulations are exercises of authority that "really [are]
incidental to, and contingent upon, specifically delegated powers under the Act.'" Comcast, 600 F.3d at 653(quoting National Ass'n of Regulatory Util. Comm'rsv. FCC (NARUC II), 533 F.2d 601, 612 (D.C.
Cir. 1976)). For to treat as ancillary a claim of authority that would
itself justify the plenary imposition of common-carrier-type access,
public disclosure, non-discrimination, and price-fixing regulation upon a
non-common carrier, "would [not] virtually[, but completely] free the
Commission from its Congressional tether." Id. at 655.

Accepting the FCC's theory of its own ancillary authority under
Section 706 of the 1996 Act, or any other provision, would affirm that
the FCC possesses unbounded authority to regulate broadband
Internet. This fact is demonstrated by the FCC's inability to identify in
17

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 36 of 40
the Order any substantive limits on its authority to regulate broadband
Internet service under its theory. The most it could do was to try to
"obviate the concern of some commenters" by suggesting that it still is
limited to regulating "'interstate and foreign commerce in
communication by wire and radio,'" Order, 76 Fed. Reg. at 59215, 59216
n.129 (quoting Act § 1; 47 U.S.C. § 151), and so presumably could not
regulate the medical industry or the waters of the United States, for
example. The FCC only confirms that it views itself as having plenary
authority to regulate broadband Internet providers when it asserts that
its "understanding of Section 706(a) is . . . harmonious with other
statutory provisions that confer a broad mandate on the Commission,"
being "no broader than other provisions," such as various common-
carrier regulations. Order, 76 Fed. Reg. at 59216.

In obedience to the axiom that "administrative agencies may [act]
only pursuant to authority delegated to them by Congress,'" Comcast,
600 F.3d at 654 (quoting American Library Association, 406 F.3d at
691), courts have uniformly, repeatedly, and rightly rejected
"unbounded" interpretations of agency ancillary authority. See Midwest Video II, 440 U.S. at 706; see, e.g., Comcast, 600 F.3d at 655; Am.
18

USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 37 of 40Library Ass'n, 406 F.3d at 694; NARUC II, 533 F.2d at 617
("Commission power over the communications industries is not
unlimited"). That should be the result here in deference both to the
express Congressional command to leave the Internet "unfettered by
Federal or State regulation," Section 230(b)(2); 47 U.S.C. § 230(b)(2),
and Congress' implicit direction arising from its refusal to enact so-
called net neutrality legislation.3 In short, it is clear that the FCC
presently lacks any broad authority over broadband Internet services. See FDA v. Brown & WilliamsonTobacco Corp., 529 U.S. 120, 160
(2000) ("Given this history [of Congressional engagement] and the
breadth of the authority that the FDA has asserted, we are obliged to
defer not to the agency's expansive construction of the statute, but to
Congress' consistent judgment to deny the FDA this power.").

Pursuant to Fed. R. App. P. 32(a)(7)(C) and Circuit Rule 32(a), I
hereby certify that this brief complies with the type-volume limitation
of Fed. R. App. P. 32(a)(7)(B) because the brief contains 3,527 words,
excluding the parts of the brief exempted by Fed. R. App. P.
32(a)(7)(B)(iii) and Circuit Rule 32(a)(1). I further certify that this brief
complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and
the type style requirements of Fed. R. App. P. 32(a)(6) because the brief
has been prepared in a proportionally spaced typeface using Microsoft
Word 2007 in Century Schoolbook 14-point font.

/s/ E. Duncan Getchell, Jr.

Solicitor General of Virginia

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USCA Case #11-1355 Document #1385057 Filed: 07/23/2012 Page 40 of 40

CERTIFICATE OF SERVICE

I hereby certify that the foregoing BRIEF OF THE
COMMONWEALTH OF VIRGINIA AND THE STATES OF GEORGIA,
MICHIGAN, OKLAHOMA, SOUTH CAROLINA, AND WEST
VIRGINIA AS AMICUS CURIAE IN SUPPORT OF REVERSAL has
been filed with the Clerk of the U.S. Court of Appeals for the District of
Columbia Circuit this July 23, 2012, by using the appellate CM/ECF
system, which will send notification of said filing to the attorneys of
record, who have registered with the Court’s CM/ECF system. Nine
copies of the foregoing will be filed with the Clerk of the Court for the
United States of Appeals for the D.C. Circuit within two business days.

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